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Old 09-03-2007, 02:39 PM   #21
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I think there are 2 classes of people to consider. Those who need to collect SS at 62 to live on, and those who merely want to. The first group wouldn't do this because they really can't.

For the latter group, the main reason to take it at 62 is: 1) the break-even period for collecting 4 years early, and 2) they want to make sure that they collect something if case they die before 65. They when they hit 65 or 70, they can reconsider based on their current health situation. At that point, they need to ask themselves if they now want an annuity. If not, do nothing--keep collecting the reduced amount. If yes, then it's cheaper to buy the annuity from SS than from an insurance company.
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Old 09-03-2007, 05:36 PM   #22
Thinks s/he gets paid by the post
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Originally Posted by Independent View Post
(Looking at Publication 17, it appears that you could simply use Method 1 - treat the repayments as a deductible expense in this year - and ignore the recalculations required for Method 2. This may not maximize your tax refund, but it is a lot simpler. It seems especially appropriate if you spent the SS benefits so that you didn't have to withdraw from your IRA, and now you make a big IRA withdrawal for the repayment. It seems that the deduction and the IRA withdrawal exactly cancel each other out.)
Interesting. Seems that if you time the SS repayment right you can also offset at least one RMD.
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